I'm Buying Up To 8% Yield For Recurring Income

Core Viewpoint - The article emphasizes the attractiveness of dividend stocks, particularly Energy Transfer and Crown Castle, which are undervalued and provide high yields, while also owning essential infrastructure assets that offer downside protection. Group 1: Energy Transfer (ET) - Energy Transfer offers an 8% yield and is a significant player in the energy midstream sector, with a robust network for transporting natural gas, crude oil, and refined products [2][10] - Distributable cash flow (DCF) for ET grew by $350 million year-over-year to $2.36 billion in Q1 2024, driven by growth projects and a 44% increase in crude oil transport volumes [3][7] - The company is well-positioned to meet global energy demand, particularly due to the ongoing energy crisis in Europe, with several expansion projects underway [4][5] - Management raised the 2024 adjusted EBITDA guidance to $15.15 billion, supported by a strong balance sheet and improved credit ratings from S&P and Fitch [6] - The distribution yield is well-covered by a 2.3x DCF-to-Distribution coverage ratio, with a 3.3% year-over-year increase in distributions [7][9] - ET is currently undervalued compared to peers, with a price-to-cash flow (P/CF) ratio of 5.3x, significantly lower than Enterprise Products Partners and MPLX [8][9] Group 2: Crown Castle (CCI) - Crown Castle provides a 6% yield and operates a vast network of cell towers and fiber, essential for communications infrastructure [10][12] - Despite a 2% decline in site revenue and a 6% drop in adjusted EBITDA in Q1 2024, the decline was attributed to one-time cancellations from Sprint due to the T-Mobile merger [11] - CCI generated 5% organic revenue growth, with significant contributions from small cells and tower growth, indicating resilience in its business model [11][14] - The company is expected to add 16,000 new billable nodes this year, supported by a strong balance sheet with $6 billion in liquidity [15][16] - CCI's current yield is 6.2%, with potential for improved dividend coverage as organic growth rebounds [16][18] - The company is positioned to benefit from the growing demand for communications infrastructure, particularly with the expansion of 5G networks and AI applications [13][20]